What to Watch in the Day Ahead - Wednesday, April 22

Reuters Staff

8 Min Read

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Dow component Boeing Co is expected to report a rise in first-quarter profit, helped by increased deliveries. Investors will want to know more about the company’s cost-reduction efforts, given that unit costs of Dreamliner jets continue to exceed sale price. Boeing was able to show strong cash flow at the end of 2014 but it has warned that cash might be comparatively weaker in the early part of 2015. Analysts expect the company’s stock to continue rising, but investors remain cautious.

McDonald’s Corp’s new CEO, Steve Easterbrook, has a lot on his plate. He is tasked with reviving the world’s biggest restaurant chain’s falling sales and managing negative publicity around the health quotient of its food and the treatment of its low-wage workers. The company is also facing stiff competition and its franchisees, who operate the vast majority of McDonald’s global restaurants, are getting restless. The Dow company reports its first-quarter results before the market opens.

Facebook Inc is expected to post a first-quarter profit above the average analyst estimate, according to Thomson Reuters StarMine data. The world’s largest social network’s business has been booming, thanks to its mobile ads on smartphones and tablets. Many investors also expect video ads to spur the company’s growth. Facebook has been stepping up efforts to expand products such as messaging service WhatsApp and photo-sharing service Instagram. Investors will watch for the company’s outlook for the rest of 2015.

AT&T Inc, the second-biggest U.S. telecom carrier, will report fourth-quarter results amid competition and promotions, which analysts expect to have squeezed its service revenue margins. Investors will look for updates on the Dow component’s proposed $48.5 billion acquisition of DirectTV, which is under regulatory review.

The National Association of Realtors releases data on home resales in March. Sales of previously-owned homes are expected to have risen 3 percent in March to an annual 5.03 million unit-rate, after being sluggish in the prior two months due to low inventory and rising prices. (1000/1400)

Coca-Cola Co, the world’s largest beverage maker and a Dow 30 company, reports first-quarter results before the markets open. Analysts expect Coca-Cola’s sales growth in the United States to have slowed in the first quarter as the company faces weak growth in volumes.

Chipmaker Qualcomm Inc is expected to report second-quarter revenue and profit broadly in line with analysts’ expectations, according to Thomson Reuters StarMine data. Qualcomm lowered its forecast for fiscal 2015 in January, saying it did not expect its newest Snapdragon mobile chip to be used in a major customer’s flagship smartphone. Samsung opted for its own mobile processor and modem chip in the Galaxy S6 instead of equivalents from Qualcomm. The chipmaker had also warned that “challenges” with another of its chips had hurt competitiveness in China.

E-commerce company eBay Inc is expected to report first-quarter revenue and profit largely in line with Wall Street’s expectations. The company has seen strong growth in its payments business as well as its non-auction e-commerce business. Analysts expect the company to continue benefiting from the rise in demand for mobile devices as consumers increasingly use their smartphones and tablets to shop online. Investors will look for details on eBay’s plans for the spinoff of PayPal, scheduled for the second half of 2015.

Chipmaker Texas Instruments Inc is expected to report first-quarter revenue and profit largely in line with analysts’ expectations, according to Thomson Reuters StarMine data. The company expects growing demand from the auto industry to drive growth as it increases focus on analog and embedded chips.

Abbott Laboratories will report its first-quarter results before the bell. Recovering sales of the company’s infant formulas after costly recalls in Asia and improving performance of its branded generic medicines are expected to drive quarterly earnings growth despite the negative impact of a stronger dollar.

Thermo Fisher Scientific Inc, the world’s largest maker of scientific instruments, is expected to report a slight fall in first-quarter revenue as it faces pressure from a stronger dollar.

D.R. Horton Inc, the largest U.S. homebuilder, will give in its quarterly results the first indication of early trends in the spring selling season, which lasts April through June and is to homebuilders what the holiday shopping season is to retailers. Homebuilders including D.R. Horton’s smaller peers Lennar Corp and KB Home have said that better jobs data and low borrowing costs were expected to lead to a better spring season this year. In 2014, economic uncertainty kept buyers away. Investors will also be looking for D.R. Horton’s comments on demand from first-time home buyers, its target audience, who have been absent from the market so far.

Data storage company EMC Corp is expected to report first-quarter profit and revenue below analysts’ estimates, according to Thomson Reuters StarMine data. In January, the company forecast 2015 profit below analysts’ expectations and said it would cut jobs. EMC, which earns nearly half of its revenue from markets outside the United States, is expected to be hurt by a strong dollar. Analysts say enterprise storage demand has been mixed in the quarter, which may hurt EMC.

Programmable chip maker Xilinx Inc will report fourth-quarter results after the markets close. The company, which dominates the programmable chip market along with Altera Corp, is expected to report profit and revenue largely in line with average analyst estimates, according to Thomson Reuters StarMine data. Investors will look for updates on sales to the broadcast, consumer and automotive end markets and sales to communications and data center customers.

AutoNation Inc, the largest U.S. car dealer chain, reports first-quarter results. Investors will be watching the company’s margins on new car sales, any potential expansion moves and any concerns about U.S. consumer spending.

Specialty mattress maker Select Comfort Corp is expected to report first-quarter revenue slightly below the average analyst estimate, according to Thomson Reuters StarMine data. The company has reported higher-than-expected sales for the previous four quarters. Investors will be looking out for Select Comfort’s Sleep Number mattress sales as well as for any changes in the company’s full-year forecast. The company forecast 2015 profit below analysts’ estimates in February.

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